CVS ready to move in on former Apple Tree location — but not without liquor license
by Tony de Garate
Nov 13, 2013 | 2610 views | 0 0 comments | 7 7 recommendations | email to a friend | print
The former site of Apple Tree Market has sat vacant for nearly a year. The property owner, Elliot Megdal, said he has had trouble leasing the location to other grocery stores. Former Apple Tree owner Saad Hermez said he supports CVS as a tenant because he plans to open another market in the community, but wouldn’t be able to do so with more competition. Photo by Tony de Garate
The former site of Apple Tree Market has sat vacant for nearly a year. The property owner, Elliot Megdal, said he has had trouble leasing the location to other grocery stores. Former Apple Tree owner Saad Hermez said he supports CVS as a tenant because he plans to open another market in the community, but wouldn’t be able to do so with more competition. Photo by Tony de Garate
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CVS Pharmacy thinks the old Apple Tree grocery store, the long-vacant building at 4949 Santa Monica Ave., would make a dandy spot for its 26th San Diego-area location.

Corporate officials reportedly love the building. They say the available floor space and parking is quite adequate, and they admire the curved roof and other features that reveal its past as a 1960s-style Safeway supermarket, according to Steve Laub of Land Solutions, Inc., a local project management-consulting firm that is overseeing the permitting process.

What CVS doesn’t have is permission to sell beer, wine and spirits — and the prospect of a liquor license whipped up a standing-room-only crowd Nov. 6 at the monthly meeting of the Ocean Beach Planning Board (OBPB).

CVS was hoping to get the OBPB to give its blessing now, while the San Diego Police Department is in the middle of an investigation that could make or break whether a liquor license is granted. Instead, with more than three dozen audience members crammed into the meeting room of the Ocean Beach Recreation Center, it voted 10-0 to put off a decision until that investigation is complete.

Police approval is crucial because the property sits in a census tract that, according to a formula used by the state Alcohol Beverage Control Department, already has too many off-premise liquor licenses. Under state law, no more licenses can be granted without a finding that another license would serve “public convenience or necessity.” Police have 90 days to make that determination, said Lt. Dan Plein of SDPD’s Vice, Permits and Licensing unit.

Community approval is one of the factors police look at when they make that decision, said Plein, who was one of two vice officers at the meeting.

Obtaining that determination, or PCN finding, is the first step in CVS’ plan to occupy the building. If police make a PCN finding in CVS’ favor, the company will formally submit a liquor license application, Laub said, which triggers posting and notification requirements and a public comment period.

Even though alcohol makes up only five percent of CVS’ total sales, it’s a critical part of the company’s business, company officials said.

“Alcohol is a convenience we need (to offer) to be competitive,” said Wolfgang Schiefer, district operations manager for CVS.

“It brings people in to buy other products,” Laub said. “CVS wants to make it so people can come in and get their whole list of shopping items.”

Nearly every citizen who spoke opposed the liquor license or had concerns. Some lamented a grocery store being replaced by a retail outlet with offerings so similar to a nearby Rite Aid. Others wanted CVS to show it would be a good corporate neighbor.

Some, like Tommy Gomes, who described himself as a licensed drug and alcohol counselor, just plain don’t want any more alcohol in Ocean Beach.

“We don’t need more booze,” Gomes said. “There’s money to be made someplace else.”

Gretchen Kinney Newsome, president of the Ocean Beach Town Council, asked about the possibility of a “community benefits package” that could include things like college scholarships, community clean-up sponsorships and a pledge to hire locally — an agreement similar to those requested by communities in response to Wal-Mart Supercenters.

“This is not a ‘big box’ store,” Laub said.

“It’s big box for Ocean Beach,” Kinney Newsome replied.

While not addressing the idea of a pledge to hire locally, Schiefer said the 20-30 jobs, except for pharmaceutical positions, would be “open” to local applicants.

Craig Klein called on CVS to provide a security guard, restrict alcohol sales after dark and install anti-theft devices on spirits bottles. Laub said he was open to allowing some conditions on the liquor license, but said CVS already has training procedures in place to address concerns about serving minors and allowing homeless people to congregate.

Laub also said CVS boasts high rates of employee retention and job satisfaction, and offers “great benefits and pay programs.

“This is the kind of establishment you want,” Laub said. “CVS will be the most responsible staff you have out there.”

Former Apple Tree co-owner Saad Hermez was one of the few to speak in favor. Hermez closed Apple Tree after 25 years as of Jan. 1 when he lost his lease with the building’s owner, Elliot Megdal of Los Angeles-based Megdal and Associates.

Hermez said he plans to open a new grocery store at the former Bank of America location at 4976 Newport Ave. If another grocery store were to open at the former Apple Tree, Hermez said he’d have to abandon his plans because of the competition.

His new store will be a “brand-new supermarket with the fresh products and produce you desire,” Hermez said.

Laub said Megdal had trouble finding a tenant until CVS stepped up. He said Megdal told him grocery stores weren’t interested because the site was lacking in floor space and water and electrical capacity.

“He was running out of takers,” Laub said. “We can make it work for us.”

OBPB members appeared to be split on the issue.

Board member Bill Bushe said allowing the liquor license could threaten the community character others have fought to maintain.

“Pacific Beach used to look like OB. Now it’s just a party place for students,” Bushe said.

“I do not share that concern,” vice chairman Peter Ruscutti said. “Zoning will prevent us from becoming another PB.”

Ruscutti said he “reluctantly” favored the liquor license even though he would have preferred a grocery store at the location.

“It’s not fair to recommend denial because I don’t like who the tenant is,” he said.

Even though the Board tabled the action item, CVS is not obligated to return to the OBPB if police make a PCN finding in CVS’ favor. Approval is not required from the OBPB, which has only advisory powers on land use and quality-of-life issues.

But with all the concerns expressed, “I would think they’d want to come back,” OBPB chairman Tom Gawronski said.
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